Trade Clarity

After a couple years of constant exposure to Trump’s speeches, statements, off-the-cuff remarks and, especially, tweets, it behooves the prudent observer to avoid taking every word literally… AND, to avoid waving off everything he says as “serious but not literal.” Trump is indeed sloppy with his rhetoric, far too enamored with superlatives and unnecessary adjectives, and unapologetic about his propensity of saying contradictory things.

But, amidst all the noise, we occasionally find a bit of “signal,” and we just got a good one in Trump’s harsh words for those oh-so-hated (by the Left, and now by the Donald) Koch brothers and their Americans For Prosperity network.

As reported by the Wall Street Journal, Trump has turned his Twitter-attention on the Kochs, who haven’t fallen in line on the parts of Trump’s agenda and policies that don’t align with their values. The Kochs are famously in favor of free trade and robust immigration, with Charles Koch once observing that “I would let anybody in who will make the country better, and no one who will make it worse.”

Them’s fightin’ words nowadays, with Trump supporters itching to close the borders (even as they pretend to distinguish between legal and illegal immigration).

This is nothing we don’t already know. It’s quite clear where Trump stands on immigration. The revelation here is on trade.

Trump tweeted that the Kochs “have become a total joke in real Republican circles, are against Strong Borders and Powerful Trade. I never sought their support because I don’t need their money or bad ideas.”

Lets review Trump’s past few months regarding trade. 2018 is the year of the Trade War, with Trump escalating tariffs on an increasing number of foreign-made products, and being met with like-kind escalations on the other side. Trump has also repeatedly spoken of unfair trade deals, trade deficits and imbalances, a desire for truly free trade, and a desire for American companies to repatriate jobs they’ve outsourced (and more). If this sounds like a conflicting set of views, that’s because it is. His critics can cherry-pick whatever they want to carp about from the basket of words, because that basket is filled with a soup-to-nuts variety.

His supporters can do the same, of course, but whereas his critics are often in-the-moment reactionaries, his supporters allege a long game, with free trade as its goal. Given the “he’s said everything” reality, it’s been very hard to figure out what the truth is.

Until now. Trump’s criticism of the Kochs on trade makes it clear where his propensities lie, and they’re not in actual free trade.

Remember the phrase “Powerful Trade.” It’s the telltale. It speaks of a winner-loser mentality, rather than the win-win nature of truly free trade, free enterprise, and free markets. It’s a competitor’s mindset, where America benefits only if other countries are put by force of government into a position of disadvantage. It’s protectionist and nativist and, despite ample historical evidence that free trade trumps protectionism, it’s now clear that it’s what Trump truly believes.

No surprise, in retrospect. His message has been a nativist one since the get-go, and his rise to the nomination and the Presidency is due in no small part to his hard-line position on immigration. It would indeed be a disconnect if Trump was in his heart a free trader, but we’ve seen enough words in that direction to leave open questions and doubts.

Many of Trump’s supporters are protectionists and nativists. Some always were, while others have become so because they refuse to consider the idea that they can support some of his positions and actions while criticizing others. The latter see the current climate as zero-sum, yield-no-ground, concede-no-points, and support-Trump-no-matter-what. The wilier of these folks are the ones who insist that the real goal is free trade, even as Trump piles up the tariffs and gleefully escalates the trade war (spanking the market and risking harm to the economy that his deregulation and tax cuts have benefited). They do this to undermine the criticisms of free-traders, who point out that protectionism runs contrary to Republican and conservative ideals, and they’ve had some success.

No longer. “Powerful Trade” tells us what we need to know. Trump is no free-marketeer. He is, on trade, on industry, and on immigration, a nativist. He likes the trade war, and likes tariffs, because it’s an exercise of power intent on bending an “enemy” (i.e. a foreign trading partner) into submission. The goal isn’t free trade. Don’t let anyone tell you otherwise.

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.

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Free trade works when it exists in a free environment; that is to say, the factors that go into production are also free of constraint. In the United States this is not the case. Consequently, imposing constraints on wages (Cost of Goods Sold) but not on prices would naturally result in few goods being sold at higher prices when cheaper alternatives (China sourced products) exist.

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Free trade is better than the alternatives even when it’s imperfect. Furthermore, if a foreign country wants to underwrite the goods it sells us, who does that hurt? Not us, certainly – we get cheaper goods. It hurts its citizens. As do tariffs.